Hgi Automotives Limited IPO

01At a glance

What the company does: melts aluminium and zinc alloy ingots and injects the metal under high pressure into steel dies to make components such as mirror base frames, wiper bodies, engine and brake parts, pump bodies, washing machine hubs and pulleys and compressor head covers, which it then fettles, machines and paints at two leased plants in Faridabad, Haryana (DRHP p.171, DRHP p.184 to DRHP p.186).

Who pays it: original equipment makers and their suppliers in two-wheelers, four-wheelers, white goods, tractors and industrial uses; the document names SMR Automotive Systems India Limited, EDS International Inc. and Hero MotoCorp Limited as customers (DRHP p.172). The largest customer, not named, was 20.40% of FY26 revenue and the top ten 75.65% (DRHP p.29). Exports, all to the USA, were 13.40% of FY26 revenue (DRHP p.187).

Why it is raising money: up to ₹26.4 crore of the fresh issue is for plant and machinery for a new third plant at Palwal, Haryana, and up to ₹6.0 crore is to repay part of an ICICI Bank term loan (DRHP p.95, DRHP p.112). There is no offer for sale (DRHP p.1).

How fast it has grown: revenue from operations from ₹99.6 crore in FY24 to ₹129.3 crore in FY26, about 13.9% a year, and profit after tax from ₹3.6 crore to ₹6.1 crore, about 29.6% a year (our arithmetic, DRHP p.58). Profit after tax was ₹8.6 crore in FY25, so it fell in FY26 (DRHP p.58).

The one thing to understand: borrowings rose from ₹27.4 crore at March 2024 to ₹50.0 crore at March 2026, 2.07 times net worth (DRHP p.57, DRHP p.281), while the plant the issue pays for is on land leased from November 1, 2026, with its shed still to be built and its pollution consent to establish applied for on September 25, 2026 and pending (DRHP p.97, DRHP p.308).

02The business, in plain words

What HGI Automotives does

HGI Automotives was incorporated on June 1, 1998 as HGI Automotives Private Limited and became a public company with a fresh certificate dated April 22, 2025 (DRHP p.2). Manufacturing began in April 1999; the company moved to its present Unit I at Plot No. 19, Sector 58, Faridabad in November 2012 and added Unit II at Plot No. 1105, Sector 58 in August 2023 (DRHP p.172). The steps, as the document describes them (DRHP p.184 to DRHP p.186):

• Raw metal: aluminium alloy ingots, molten aluminium and zinc ingots from approved suppliers, tested in an in-house laboratory (DRHP p.184, DRHP p.198).
• Melting and cleaning: furnaces hold the melt at about 650°C to 720°C; the metal is cleaned with flux powder and nitrogen to cut porosity (DRHP p.184).
• High pressure die casting: molten metal is shot into a die at 30 to 100 metres a second and 100 to 2,000 bar, a cycle of 30 seconds to 2 minutes (DRHP p.185).
• Finishing: fettling, shot blasting, powder coating, machining, leak testing and ultrasonic washing, as each part needs (DRHP p.185, DRHP p.186).
• Packing and dispatch: by transporters or direct delivery to customer plants (DRHP p.186).

An automotive or appliance maker issues a purchase order for a part to its drawing → HGI Automotives builds or uses a die, casts the part in aluminium or zinc and machines and paints it → it delivers the finished part to the customer's plant → it is paid the agreed price per part, with metal cost increases passed on to customers as a practice, after a time lag (DRHP p.33, DRHP p.34, DRHP p.186).

The company holds ISO 9001:2015, IATF 16949:2016, ISO 14001:2015 and ISO 45001:2018 certificates (DRHP p.171, DRHP p.307). Both plants are leased: Unit I from SSK Automotive Private Limited, a promoter company, at ₹7,00,000 a month rising 5% a year to February 28, 2030, and Unit II from Global Industrial Enterprises at ₹8,50,000 a month rising 5% a year to July 31, 2028 (DRHP p.33, DRHP p.34). It had 126 employees on its payroll and 422 contract labourers at August 31, 2026 (DRHP p.199). It has no subsidiary, no joint venture and no registered trademark; two logo applications are under examination (DRHP p.221, DRHP p.308).

Earnings equation: Revenue = number of parts sold × price per part. The document gives tonnes of metal cast, not parts sold or prices, so the equation can only be approached through tonnes produced (see section 04).

03Where the money comes from

By segment, revenue from operations (₹ crore):

Source: DRHP p.187, converted from ₹ lakh. Four wheelers fell from 54.98% of revenue in FY25 to 32.42% in FY26, and white goods rose from 29.10% to 37.50% (DRHP p.187).

By place: within India ₹94.2 crore, ₹104.0 crore and ₹111.9 crore; outside India, all to the USA, ₹5.4 crore, ₹17.4 crore and ₹17.3 crore, which is 5.42%, 14.31% and 13.40% of revenue (DRHP p.187). In FY26 Uttar Pradesh was 45.67% of revenue, Haryana 31.30%, Punjab 5.68% and Himachal Pradesh 3.13% (DRHP p.187). By type, sale of products in India was ₹111.8 crore, exports ₹17.3 crore and job work ₹0.10 crore in FY26 (DRHP p.270).

HGI Automotives customers: how concentrated the revenue is

Source: DRHP p.29, DRHP p.192. The tables do not name the customers. The largest customer brought ₹26.4 crore of FY26 revenue (DRHP p.192). Revenue depends on a few customers: the top five were more than half of sales in each of the three years, though the share fell each year (DRHP p.29). Customers order through purchase orders, with no long-term or volume contracts (DRHP p.33).

On the supply side, the largest supplier was 29.18% of FY26 purchases and the top ten 89.91%, against 15.41% and 78.62% in FY24 (DRHP p.30).

04The growth record

HGI Automotives financials: revenue, profit and margins

Source: DRHP p.57, DRHP p.58, DRHP p.59, DRHP p.117, DRHP p.119, converted from ₹ lakh. Revenue from operations went from ₹99.6 crore in FY24 to ₹129.3 crore in FY26 and profit after tax from ₹3.6 crore to ₹6.1 crore (DRHP p.58). The company's EBITDA is profit plus tax, interest and depreciation less other income; its RoCE is EBIT over average capital employed, counting only long-term borrowings in capital employed (DRHP p.119).

Our arithmetic over FY24 to FY26: revenue grew about 13.9% a year and profit after tax about 29.6% a year (our arithmetic, DRHP p.58); EBITDA grew about 31.7% a year, as the company also reports (DRHP p.117). EBITDA margin moved from 10.37% to 13.85%, up 348 basis points, so from 10.4% to 13.9% rounded (DRHP p.117). Revenue rose 21.90% in FY25 and 6.50% in FY26, and profit after tax rose 135.48% in FY25 and fell 28.66% in FY26 (DRHP p.294, DRHP p.295).

The year ends on March 31 throughout. Restatement raised FY25 profit after tax from ₹8.2 crore audited to ₹8.6 crore restated and lowered FY24 from ₹3.7 crore to ₹3.6 crore, for MSME interest, employee benefits, tax and lease rent equalisation (DRHP p.282). The abridged prospectus says there are no audit qualifications not given effect in the restated statements (AP p.9). The independent auditor's examination report listed as page F1 is not reproduced in the PDF, which starts with the balance sheet (DRHP p.249, DRHP p.250).

What sits around the record:

• Cash: operating cash flow was ₹7.7 crore in FY26, ₹9.2 crore in FY25 and ₹7.6 crore in FY24 (DRHP p.59). Purchase of plant and equipment was ₹10.8 crore, ₹20.8 crore and ₹8.8 crore in FY24, FY25 and FY26 (DRHP p.59).
• Other income was ₹0.70 crore in FY26, about 8.5% of profit before tax, mostly duty drawback on exports and interest (our arithmetic, DRHP p.58, DRHP p.270).
• Debt: borrowings were ₹50.0 crore at March 31, 2026 (DRHP p.57), total debt to equity 2.07 times, so 2.1× (DRHP p.281). Net of ₹0.07 crore of cash they were about 2.8× FY26 EBITDA (our arithmetic, DRHP p.57, DRHP p.117). Return on capital employed was 27.46%, so 27.5% rounded (DRHP p.119). Finance cost was ₹2.8 crore in FY26 (DRHP p.58).
• Working capital: receivables, inventory less trade payables came to about 86 days of FY26 revenue (our arithmetic, DRHP p.57, DRHP p.58); receivables were about 44 days of revenue in FY24 and 55 days in FY26 (our arithmetic, DRHP p.57, DRHP p.58).
• Customers and suppliers: the largest customer was 20.40% of FY26 revenue, so 20.4% rounded, and the top ten 75.65%, so 75.7% (DRHP p.29); the largest supplier was 29.18% of FY26 purchases, so 29.2% (DRHP p.30); exports to the USA were 13.40% of FY26 revenue, so 13.4% (DRHP p.187).
• Promoter company: rent, a corporate guarantee fee and interest paid to SSK Automotive Private Limited came to ₹1.6 crore in FY26 (our arithmetic, DRHP p.64).
• Contingent liabilities and commitments: ₹2.7 crore at March 31, 2026, of which ₹2.1 crore is capital commitments and ₹0.54 crore customs duty saved against export obligations (DRHP p.35).
• Capacity: utilisation of the two plants was 83.01% in FY26, so 83.0% rounded (DRHP p.97).
• Use of the issue: up to ₹26.4 crore for plant and machinery and up to ₹6.0 crore for loan repayment (DRHP p.95).

05What the growth is made of

Revenue from operations rose ₹29.7 crore from FY24 to FY26 (our arithmetic, DRHP p.58). By segment (our arithmetic, DRHP p.187):

• Two wheelers: up ₹13.9 crore, from ₹10.0 crore to ₹23.9 crore.
• White goods: up ₹6.1 crore, from ₹42.4 crore to ₹48.5 crore.
• Agriculture: up ₹4.8 crore, from ₹2.2 crore to ₹7.0 crore.
• Industrial applications: up ₹2.9 crore, from ₹5.1 crore to ₹8.0 crore.
• Four wheelers: up ₹2.0 crore, from ₹39.9 crore to ₹41.9 crore, after ₹66.7 crore in FY25.

By place, exports to the USA rose ₹11.9 crore, from ₹5.4 crore to ₹17.3 crore (our arithmetic, DRHP p.187). The management discussion puts FY25 growth down to exports to new global customers and more orders from existing ones, and FY26 growth to new customers and more orders from existing ones (DRHP p.294, DRHP p.295).

Volume: the two plants produced 2,791 MT in FY24, 3,190 MT in FY25 and 3,131 MT in FY26 (DRHP p.97). Production rose about 12.2% from FY24 to FY26 while revenue rose about 29.8% (our arithmetic, DRHP p.97, DRHP p.58).

Realisation, read from production: revenue per tonne produced was about ₹3.57 lakh in FY24 and about ₹4.13 lakh in FY26 (our arithmetic, DRHP p.58, DRHP p.97). At the FY24 figure, the extra 340 MT produced accounts for roughly ₹12.1 crore of the ₹29.7 crore increase; the rest, about ₹17.6 crore, is price, mix, machining and painting content and the gap between tonnes produced and tonnes sold (our arithmetic, DRHP p.58, DRHP p.97).

This uses tonnes produced, not tonnes sold, and the document gives no prices, so the split is approximate. Job work paid to outside parties rose from ₹1.1 crore in FY24 to ₹5.9 crore in FY26 (DRHP p.273), so some processing was bought in.

06Earnings quality

The item that needs explaining is inventory. Inventory rose from ₹10.2 crore at March 2024 to ₹22.6 crore at March 2026, and ₹21.2 crore of it is work in progress, against ₹0.64 crore of raw material (DRHP p.57, DRHP p.269). The profit and loss account counts the build-up of work in progress as a ₹6.2 crore reduction in cost in FY26 and ₹6.1 crore in FY25 (DRHP p.58).

Two cash flow lines do not tie to the balance sheet. The FY26 cash flow shows other current assets up ₹12.0 crore and other current liabilities up ₹9.4 crore (DRHP p.59), while the balance sheet shows other current assets up ₹2.4 crore and other current liabilities down ₹0.61 crore (DRHP p.57). Read from the filing: the two differences largely offset, so operating cash flow is not much changed by them, but the document does not explain them.

07The balance sheet

At March 31, 2026 total assets were ₹90.1 crore: property, plant and equipment ₹36.3 crore, inventories ₹22.6 crore, trade receivables ₹19.6 crore, other non-current assets ₹5.6 crore (mostly fixed deposits of ₹3.1 crore), other current assets ₹3.8 crore and cash ₹0.07 crore (DRHP p.57, DRHP p.269). Against them: long-term borrowings ₹12.4 crore, short-term borrowings ₹37.6 crore, trade payables ₹11.9 crore, other liabilities and provisions ₹4.1 crore and net worth ₹24.1 crore (DRHP p.57). Current liabilities of ₹52.6 crore exceed current assets of ₹46.1 crore (DRHP p.57).

Borrowings of ₹50.0 crore at March 31, 2026 were (DRHP p.286 to DRHP p.288):

Source: DRHP p.263, DRHP p.286 to DRHP p.288. Secured loans total ₹49.4 crore (DRHP p.37). The bank loans carry personal guarantees of Suresh Chand Garg, Deepak Gupta and Kusum Gupta, a corporate guarantee of SSK Automotive Private Limited, a charge on SSK Automotive's property at Plot No. 19, Sector 58, and a charge on a house at Sector 14, Faridabad owned by Suresh Chand Garg and Kusum Gupta (DRHP p.38, DRHP p.288).

One ICICI Bank cash credit was drawn above its limit at March 2026, which the note puts down to a cheque issued but not cleared (DRHP p.263). Debt service coverage was 0.66 in FY26 and 0.68 in FY25 (DRHP p.279).

Source: DRHP p.57, DRHP p.95, DRHP p.122, DRHP p.285. The capitalisation statement leaves the post-issue column blank and prints share capital as ₹17.5 crore against ₹17.2 crore in the balance sheet (DRHP p.285, DRHP p.57). A preferential issue of 4,40,400 shares at ₹38.42 brought ₹1.7 crore on September 3, 2026, after the balance sheet date (DRHP p.83, DRHP p.122). Contingent liabilities and commitments were ₹2.7 crore (DRHP p.35). Export obligations under two EPCG licences of ₹4.8 crore FOB had ₹3.5 crore still to be met, with validity printed as 06/12/2030 (DRHP p.43).

08What the money is for

HGI Automotives IPO objects: what the money is for

Source: DRHP p.95, DRHP p.96. The rupee size of the fresh issue depends on a price not yet set, so the share of each object cannot be worked out (DRHP p.95). The abridged prospectus prints the machinery object as ₹26.5 crore (AP p.6).

Plant and machinery, ₹26.4 crore: seven high pressure die casting machines from Yizumi Precision Machinery, eight Fanuc Robodrill machining centres, nine Ace CNC lathes, two Zeiss inspection machines and a spray pre-treatment and painting line from Crescent Techno Solutions (DRHP p.97 to DRHP p.111).

The quotations, converted at RBI rates of September 25, 2026, add to about ₹26.6 crore before GST, freight and installation, which the company will pay from internal accruals (our arithmetic, DRHP p.99 to DRHP p.111). Only the painting line has been ordered, with ₹0.25 crore paid in advance from internal accruals (DRHP p.35, DRHP p.105). The machines go into Facility III at Village Dundsa, Palwal, 3,542 sq. metres leased from T.R.

Solvent Oils Private Limited for five years from November 1, 2026 at ₹10,87,300 a month rising 5% a year (DRHP p.34, DRHP p.97). The company will build the shed from internal accruals by December 31, 2026 and expects the plant to run tentatively from January 2027, with a proposed capacity of 5,250 MT (DRHP p.97). Deployment is ₹8.8 crore in FY27 and ₹17.6 crore in FY28 (DRHP p.114).

Loan repayment, ₹6.0 crore: against an ICICI Bank term loan for machinery, sanctioned at ₹21.2 crore, with ₹17.5 crore outstanding at August 31, 2026 (DRHP p.112). The company says the repayment will not benefit the promoters or related parties (DRHP p.113).

The objects have not been appraised, and no monitoring agency will be appointed because the issue is below ₹50 crore (DRHP p.70, DRHP p.114). The document's monitoring paragraph also refers to a working capital object of more than ₹5 crore that is not among the objects (DRHP p.70).

Into the business the fresh issue of up to 63,50,000 shares, at a price not yet set (DRHP p.55). To selling shareholders nothing: there is no offer for sale (DRHP p.1).

09Who is selling

HGI Automotives IPO offer for sale: who is selling

Nobody. The whole issue is a fresh issue of up to 63,50,000 shares of ₹10, amount not set (DRHP p.55), and the document marks the offer for sale “NOT APPLICABLE AS THE ENTIRE ISSUE CONSTITUTE FRESH ISSUE OF EQUITY SHARES” (DRHP p.1, AP p.1). The fresh issue of 63,50,000 shares would be about 26.5% of the 2,39,43,170 shares after the issue (our arithmetic, DRHP p.77). The promoters and promoter group will not take part in the issue (DRHP p.94).

10Promoters

The promoters are Suresh Chand Garg, Deepak Gupta, Kusum Gupta and SSK Automotive Private Limited (DRHP p.240). The document states that Suresh Chand Garg is the father of Deepak Gupta and the husband of Kusum Gupta (DRHP p.226). Holdings: Suresh Chand Garg 52,78,240 shares (30.00%), Deepak Gupta 31,79,000 (18.07%), Kusum Gupta 30,68,790 (17.44%) and SSK Automotive Private Limited 53,75,000 (30.55%), 96.07% in all (DRHP p.87).

• Suresh Chand Garg, 68, Chairman and Managing Director, a director since incorporation in 1998, over 28 years in aluminium die casting (DRHP p.223, DRHP p.225).
• Deepak Gupta, 34, Whole-time Director, a director since 2012, a graduate in accounting and finance from the University of Bradford, over 14 years in die casting, in charge of design, production, sales and planning; Chief Financial Officer from January 1, 2025 to July 24, 2026 (DRHP p.223, DRHP p.225, DRHP p.238).
• Kusum Gupta, 59, a director since incorporation and Non-Executive Director since April 23, 2025, overseeing social initiatives; the document says Kusum Gupta's educational documents are not traceable (DRHP p.224, DRHP p.225, DRHP p.228, DRHP p.41).
• SSK Automotive Private Limited, incorporated June 23, 2011, owned by the three individual promoters, with FY26 revenue of ₹0.84 crore and profit after tax of ₹0.76 crore (DRHP p.241, DRHP p.242).

Pay: remuneration to Suresh Chand Garg and Deepak Gupta was ₹0.72 crore in FY24 and ₹0.90 crore in FY26 (DRHP p.63, DRHP p.64). From June 1, 2026 each may be paid up to ₹75.00 lakh a year (DRHP p.227). Two relatives of directors, Ashish Bhatia and Shelly Bansal, drew salaries of ₹0.24 crore in FY26 (DRHP p.64).

Promoter company: SSK Automotive Private Limited owns Unit I and leases it to the company; it was paid ₹0.84 crore of rent, a ₹0.68 crore corporate guarantee fee and ₹0.09 crore of interest in FY26, ₹1.6 crore in all (our arithmetic, DRHP p.64). SSK Automotive's own FY26 revenue of ₹0.84 crore equals the rent (DRHP p.242). Its objects allow the same line of business; a non-compete and non-solicit agreement was signed on August 21, 2025 (DRHP p.43).

Guarantees and pledges: the three individual promoters give personal guarantees and SSK Automotive a corporate guarantee for the ICICI Bank, HDFC Bank, Yes Bank and SIDBI loans (DRHP p.37, DRHP p.38). No promoter shares are pledged (DRHP p.84).

Cases: no criminal, civil, tax or regulatory cases against the promoters (DRHP p.301, DRHP p.303).

Promoter economics: the capital structure puts the promoters' average cost per share at ₹1.57 for Suresh Chand Garg, ₹0.39 for Deepak Gupta, ₹2.22 for Kusum Gupta and ₹0.40 for SSK Automotive, after bonus shares (DRHP p.89).

The shares came from subscriptions at ₹10 from 1998, a loan conversion at ₹37.02 in March 2021, a 3:2 bonus in March 2021, a rights issue in July 2022 and a 9:1 bonus on July 11, 2025 (DRHP p.78, DRHP p.82, DRHP p.87).

Deepak Gupta received 8,39,000 shares from Avantika Gupta on September 4, 2025 and 11,90,000 from Tannu Gupta on September 8, 2025, marked as gifts in the table and as purchases in the footnotes (DRHP p.88). The weighted average cost of all shares acquired in the last one and three years is ₹1.07, in a range of nil to ₹38.42 (DRHP p.122, AP p.9).

11Who already owns it

HGI Automotives promoter holding before and after the IPO

Source: DRHP p.87, AP p.7; the after-issue column is our arithmetic. There are 1,75,93,170 shares of ₹10 before the issue and 13 shareholders (DRHP p.77, DRHP p.93). If all 63,50,000 new shares are issued the total becomes 2,39,43,170 shares (DRHP p.77), and the promoters' 96.07% becomes about 70.6%, so 96.1% → 70.6% (our arithmetic, DRHP p.77, DRHP p.87). Promoters and promoter group together go from 97.43% to about 71.6% (our arithmetic, DRHP p.77, DRHP p.87). The document leaves the after-issue percentages blank (DRHP p.87).

The six public holders bought 4,40,400 shares in a preferential issue at ₹38.42 on September 3, 2026: M/s Vimaan Fintrade 1,76,400, Vinod Sethi 1,08,000, Archit Jindal 78,000, Shikha Bansal 51,600 and Sunita Chaddha 26,400, with Sonika Gupta holding 12,500 (DRHP p.81, DRHP p.83, AP p.7). M/s Vimaan Fintrade holds 1.00% before the issue, the only holder outside the promoter group with 1% or more (DRHP p.86). No fund or institution holds shares. The document gives different counts for two promoters in other tables: 53,03,240 shares for Suresh Chand Garg and 32,18,790 for Kusum Gupta (DRHP p.35, DRHP p.89, AP p.9).

12What changed just before the IPO

• Revenue and profit: revenue from operations went from ₹99.6 crore in FY24 to ₹129.3 crore in FY26 and profit after tax from ₹3.6 crore to ₹6.1 crore (DRHP p.58), after ₹8.6 crore in FY25 (DRHP p.58).
• Receivables: about 44 days of revenue in FY24 and 55 days in FY26 (our arithmetic, DRHP p.57, DRHP p.58).
• Promoter pay: ₹0.72 crore in FY24 and ₹0.90 crore in FY26 for Suresh Chand Garg and Deepak Gupta (DRHP p.63, DRHP p.64); up to ₹75.00 lakh a year each from June 1, 2026 (DRHP p.227).
• Converted to a public company: shareholders approved on March 19, 2025; fresh certificate April 22, 2025 (DRHP p.2).
• Bonus issue: 9:1, 1,54,37,493 shares on July 11, 2025, taking the count to 1,71,52,770 (DRHP p.82).
• Last allotment before the IPO: preferential issue of 4,40,400 shares at ₹38.42 a share on September 3, 2026 (DRHP p.83). One table prints 4,04,400 shares for the same allotment (DRHP p.83). The company says it is not considering a pre-IPO placement (DRHP p.83).
• Auditor change: Sulekh Chand Jain and Co audited FY24; NGMKS & Associates was appointed on October 21, 2024 from FY2024-25 and reappointed to FY2029-30 (DRHP p.71).
• Board and officers: Suresh Chand Garg became Managing Director on December 1, 2024 and Chairman and Managing Director on April 23, 2025; independent directors Suresh Agarwal and Vimal Chand Jain joined on April 23, 2025; audit committee formed June 6, 2025; Company Secretary Ashutosh Raj served from July 5, 2025 to February 28, 2026 and Shweta Khurana from March 1, 2026; Jitender Singh became Chief Financial Officer on July 24, 2026 (DRHP p.6, DRHP p.228, DRHP p.229, DRHP p.238).
• Plant closure order: in March 2026 two facilities were under closure directions of the Commission for Air Quality Management; temporary permissions followed an approach to the National Green Tribunal, and the directions were revoked on May 22, 2026 (DRHP p.28).
• Debt: borrowings rose from ₹27.4 crore at March 2024 to ₹42.7 crore at March 2025 and ₹50.0 crore at March 2026 (DRHP p.57); a ₹5.8 crore yen buyer credit from Yes Bank was added in FY25 (DRHP p.264).
• Related parties: loans from Kusum Gupta, S C Garg HUF and Avantika Gupta Bhatia were repaid in FY25; SSK Automotive lent ₹1.0 crore in FY26, of which ₹0.62 crore was outstanding at March 2026 (DRHP p.63).
• New plant: lease for Facility III signed from November 1, 2026; consent to establish applied on September 25, 2026 (DRHP p.34, DRHP p.308).
• Dividend: ₹1 a share, ₹0.17 crore, for FY25; none for FY24 or FY26 (DRHP p.248).

13Capacity and expansion

Source: DRHP p.97, DRHP p.200, certified by Garg & Associates, chartered engineers, on September 25, 2026 (DRHP p.97). The figures are for the two plants together; the document does not split them by plant. Unit I has 20 die casting machines from 90 to 650 tonnes and Unit II has 5 from 180 to 900 tonnes (DRHP p.200, DRHP p.206).

The planned addition is Facility III at Palwal with a proposed installed capacity of 5,250 MT a year from seven die casting machines: two of 400 tonnes for 1,035 MT, one of 500 tonnes for 500 MT, two of 700 tonnes for 1,520 MT and two of 900 tonnes for 2,195 MT (DRHP p.97). Commissioning is planned tentatively from January 2027 (DRHP p.97). The consent to establish is pending, and the consent to operate, factory licence and fire certificate are still to be applied for (DRHP p.98). The step from capacity to revenue cannot be made from the filing, because the document gives no prices or tonnes sold.

14Market size and industry structure

HGI Automotives industry: market size and growth

As claimed: the risk factors say the industry information comes from a report titled “Machine Components used in the Automotive Industry” dated September 24, 2026, prepared by D&B India and commissioned and paid for by the company (DRHP p.46). The chapter itself cites ACMA, SIAM, MOSPI, the IMF and IBEF on its pages (DRHP p.129, DRHP p.150, DRHP p.153, DRHP p.167). It sizes the Indian auto component industry at US$80.2 billion of turnover in FY2025, up 9.6% on the year, with supplies to domestic vehicle makers up 10%, the aftermarket up 6% and exports up 8% (DRHP p.150).

The part that is addressable: the company sells high pressure die-cast aluminium and zinc parts to vehicle makers, appliance makers and tractor makers (DRHP p.171). The chapter explains die casting and lists the components it makes, such as engine parts, transmission cases and motor housings (DRHP p.135 to DRHP p.141), but it gives no rupee or dollar size for die-cast components, for aluminium die casting, or for the parts used in washing machines and compressors.

What the company is today: revenue from operations was ₹129.3 crore in FY26 (DRHP p.58). Because the chapter sizes the auto component industry only in US dollars and gives no market size for die-cast parts, no share can be worked out from the filing.

Size over time: the chapter puts auto component turnover at US$49.3 billion in FY2020, US$45.9 billion in FY2021, US$56.5 billion in FY2022, US$69.7 billion in FY2023, US$74.1 billion in FY2024 and US$80.2 billion in FY2025, a growth rate of 10.2% a year (DRHP p.150). The aftermarket grew from about US$7.99 billion to US$11.47 billion over the same years (DRHP p.151). Auto component exports were US$22.9 billion in FY2025 against US$21.2 billion in FY2024 (DRHP p.153). The commissioned report projects auto component turnover of US$88.5 billion in FY2026 rising to US$130.4 billion in FY2030, 10.2% a year, citing ACMA and SIAM (DRHP p.167). Those projections are the report's, not newboard's.

Segments: the chapter divides demand between vehicles and white goods. Vehicle production in India, tractors included, rose 9% to 32.04 million units in FY2025, domestic sales 7.3% to 26.55 million and exports 18.8% to 5.46 million, citing the Ministry of Heavy Industries (DRHP p.145). Two and three-wheeler production rose from 22.46 million to 24.93 million units and passenger vehicle production from 4.90 million to 5.06 million between FY2024 and FY2025 (DRHP p.146).

The white goods market is put at US$12.44 billion in FY23 and US$15 billion in FY24, with the chapter citing a projected growth rate of 8.11% a year (DRHP p.153). Air conditioner sales reached 14 million units worth ₹35,000 crore in FY25; refrigerators were US$5.4 billion in FY24 and washing appliances US$4.44 billion (DRHP p.153, DRHP p.154). The company sells into four-wheelers, two-wheelers, washing machines, compressors and tractors (DRHP p.187).

What drives demand: the chapter names lighter vehicles for fuel economy and emission rules, a growing number of vehicles, electric vehicles and appliance demand from rising incomes (DRHP p.135, DRHP p.145, DRHP p.153). Domestic electric vehicle sales rose from 50,000 units in FY2021 to over 2 million in FY2025 (DRHP p.147), and the chapter says electric vehicles use 25% to 27% more aluminium by weight than petrol and diesel vehicles, about 250 kg each (DRHP p.148). It cites the government aim of 30% electric vehicles by 2030 and the production linked incentive scheme for autos with a budget of ₹25,938 crore for FY2022-23 to FY2026-27 (DRHP p.148, DRHP p.165).

Structure: the chapter calls the machined components sector fragmented, with large firms and many small specialised ones, and says vehicle makers' own captive units supply part of their needs (DRHP p.169). It names Bharat Forge, Motherson Sumi Systems, Minda Industries and Sundaram Fasteners as major players and Bosch, ZF and Denso as multinationals (DRHP p.169). Barriers it names are investment in advanced machines, quality standards such as ISO/TS 16949 and relationships with vehicle makers and their tier one suppliers (DRHP p.169). The company's own chapter calls its market highly competitive and fragmented (DRHP p.197).

Inputs and trade: the main inputs are aluminium and zinc ingots and molten aluminium (DRHP p.198). The chapter says shortages of semiconductors, magnesium and silicon have disrupted production schedules (DRHP p.161). India's exports of motor vehicle parts under HS code 8708 grew from US$3.94 billion in FY2019-20 to US$7.32 billion in FY2024-25, about 13.2% a year, with the USA taking 29%, Mexico 7%, Turkey 6%, Germany 6% and Brazil 4% (DRHP p.158, DRHP p.159).

Rules: the business needs factory licences, pollution consents to establish and operate from the Haryana State Pollution Control Board, hazardous waste authorisations, fire certificates, labour registrations and an importer-exporter code (DRHP p.306, DRHP p.307). The chapter adds energy conservation rules, air and water pollution law and extended producer responsibility for waste (DRHP p.162). The company's plants are in the National Capital Region, where the Commission for Air Quality Management issues directions (DRHP p.28).

What the chapter says can go wrong: falling demand for engine, fuel and exhaust parts as electric vehicles grow, quality failures and recalls, demand that varies with seasons and model launches, supply chain disruption, rising energy costs and labour shortages (DRHP p.160 to DRHP p.162). The chapter does not discuss aluminium prices, how often prices are reset with customers, or demand from the USA under tariffs, though the risk factors say past US tariffs hurt the business (DRHP p.39).

15Competitive position

HGI Automotives competitors

Source: DRHP p.120, converted from ₹ lakh. The document does not give the peers' borrowings. The same chapter prints Rico Auto Industries' revenue as ₹5,032.5 crore and RoNW as 2.32% in another table, and HGI Automotives' operating cash flow and growth rates differently in the peer table (DRHP p.117, DRHP p.120). The document does not describe what either peer makes.

What the company puts forward: long relationships with vehicle makers, customised design, two integrated plants with casting, machining and painting, an ERP system and certifications, and awards from customers such as LG, Mitsuba and Maruti Suzuki (DRHP p.116, DRHP p.188, DRHP p.195 to DRHP p.197). Against that: no long-term contracts, a supplier base where the top ten are 89.91% of purchases, both plants leased in one district, and attrition of 28.96% of employees in FY26 (DRHP p.33, DRHP p.30, DRHP p.32, DRHP p.200).

16Peers the company named

Peers named in the offer document: Rico Auto Industries Limited and Thaai Castings Limited (DRHP p.117).

Thaai Castings is about the same size as the company by revenue, with a higher margin; Rico Auto Industries is more than ten times larger with a thin margin (our arithmetic, DRHP p.120). The document gives their P/E as 65.46 and 28.73 at September 25, 2026 prices, an average of 47.10 (DRHP p.117). The company's FY26 EPS is ₹3.57 on 1,71,52,770 shares, which leaves out the 4,40,400 preferential shares of September 2026 (DRHP p.58, DRHP p.284). With no price band, no P/E for the company can be stated.

17Risks, in plain words

HGI Automotives IPO risks

Customers: the top ten customers were 75.65% of FY26 revenue (DRHP p.29) → orders come on purchase orders that can be cut at short notice (DRHP p.33) → the largest single customer was 20.40% (DRHP p.29).

Customers: one segment swing: four-wheeler parts fell from ₹66.7 crore in FY25 to ₹41.9 crore in FY26 (DRHP p.187) → a change at one or two vehicle makers moves the whole year → four-wheeler parts went from 54.98% to 32.42% of revenue (DRHP p.187).

Suppliers: the largest supplier was 29.18% of FY26 purchases and the top ten 89.91% (DRHP p.30) → the loss of one could stop production → metal cost increases reach customers only after a lag (DRHP p.34).

Regulation: air quality rules: two facilities were under closure directions of the Commission for Air Quality Management in March 2026, revoked on May 22, 2026 subject to continued compliance (DRHP p.28) → a repeat would stop production → both plants are in Faridabad, in the National Capital Region (DRHP p.28, DRHP p.32).

Business: new plant: up to ₹26.4 crore goes to machines for Facility III (DRHP p.95) → only one order is placed and the consent to establish is pending (DRHP p.35, DRHP p.308) → the shed is to be built by December 31, 2026 from internal accruals (DRHP p.97).

Business: leased premises: both plants and Facility III are on leased land (DRHP p.33, DRHP p.34) → a lease not renewed would mean moving → Unit II's lease runs to July 31, 2028 (DRHP p.34).

Financial: borrowings: borrowings were ₹50.0 crore at March 2026, up from ₹27.4 crore two years earlier (DRHP p.57) → the loans rest on promoter guarantees and promoter property (DRHP p.38) → debt service coverage was 0.66 in FY26 (DRHP p.279).

Financial: cash after machines: purchases of plant and equipment were ₹40.5 crore over FY24 to FY26 against operating cash flow of ₹24.4 crore (our arithmetic, DRHP p.59) → the gap was borrowed → current liabilities exceeded current assets at March 2026, a current ratio of 0.88 (DRHP p.119).

Financial: export obligations: ₹3.5 crore of exports are still due under two EPCG licences, validity printed as 06/12/2030 (DRHP p.43) → a shortfall means paying customs duty with interest → ₹0.54 crore of duty saved is shown as a contingent liability (DRHP p.35).

Financial: currency: exports to the USA were 13.40% of FY26 revenue and the Yes Bank loan of ₹5.8 crore is in yen, with no forward cover (DRHP p.187, DRHP p.263, DRHP p.43) → exchange rates move both → the company booked a ₹0.18 crore exchange loss in FY26 (DRHP p.273).

Promoters: SSK Automotive Private Limited, a promoter company, owns Unit I and may by its objects make similar products (DRHP p.43) → interests could differ → it was paid ₹1.6 crore in FY26 (our arithmetic, DRHP p.64).

Legal and records: share allotment forms of 1999 are not traceable, auditor appointment filings were missed, and a TDS return was 54 days late in FY24 (DRHP p.30, DRHP p.37) → penalties could follow → compounding applications have been filed (DRHP p.30).

Issue-specific: the document's figures disagree in many places, for example the machinery object of ₹26.4 crore against ₹26.5 crore in the abridged prospectus and promoter holdings that differ between tables (DRHP p.95, AP p.6, DRHP p.87, DRHP p.89) → a reader cannot be sure which figure is final → the red herring prospectus may restate them.

18Litigation and regulatory matters

Cases against HGI Automotives and its promoters

Criminal: none by or against the company, promoters, directors or key managers (DRHP p.299, DRHP p.301, DRHP p.302). Regulatory: the litigation chapter lists no actions by statutory or regulatory authorities against the company or promoters (DRHP p.300, DRHP p.301); the risk factors separately disclose the March 2026 closure directions on two facilities, revoked on May 22, 2026 (DRHP p.28). Civil, promoters: none (DRHP p.301).

In two of the labour cases the company denies that the claimants were its employees (DRHP p.300). The summary tables count the three civil cases as filed “by” the company, while the detail shows them filed against it (DRHP p.31, AP p.9, DRHP p.299). Creditors: six material creditors were owed ₹7.6 crore at March 31, 2026, out of ₹11.9 crore owed to 239 creditors (DRHP p.304).

19Related-party transactions

Source: DRHP p.63, DRHP p.64, converted from ₹ lakh. Other items: purchases from Goel Paints & Sanitary Store, whose proprietor is a relative of a director, of ₹0.02 crore in FY26; a ₹0.21 crore security deposit with SSK Automotive; and a ₹0.62 crore loan from SSK Automotive outstanding at March 2026 (DRHP p.64, DRHP p.65). The document names Shelly Bansal as Deepak Gupta's spouse (DRHP p.245). The FY26 other expenses note shows no corporate guarantee charges, while the related-party note shows ₹0.68 crore paid to SSK Automotive for guarantees in the same year (DRHP p.273, DRHP p.276).

What appeared or changed in the two years before filing: unsecured loans from Kusum Gupta, Deepak Gupta, S C Garg HUF and Avantika Gupta Bhatia, ₹1.5 crore at March 2024, were repaid in FY25; SSK Automotive lent ₹1.0 crore in FY26 and was repaid ₹0.38 crore; the guarantee fee rose from ₹0.35 crore to ₹0.68 crore; and the Unit I lease was renewed for five years from March 1, 2025 (DRHP p.63, DRHP p.64, DRHP p.33). The company says its related-party dealings are at arm's length (DRHP p.36).

20What the offer document does not say

The names and shares of the largest customers are not given; only three customers are named, without figures (DRHP p.172, DRHP p.192). Tonnes sold, parts sold and prices are not given, so growth cannot be split cleanly into volume and price. Margins by segment, by plant or for export sales are not given. Capacity and utilisation are not split by plant. There is no order book.

The industry chapter gives no market size for die-cast components and no aluminium price history. The issue size, price band, lot size, market maker, general corporate purposes amount and issue expenses are blank (DRHP p.55, DRHP p.95, DRHP p.113). The after-issue shareholding is blank (DRHP p.87). The cost of building the Facility III shed is not stated (DRHP p.97). The auditor's examination report on the restated statements is not reproduced in the PDF (DRHP p.250).

Some inconsistencies are recorded as document matters, not business ones: the machinery object is ₹26.4 crore in the objects chapter and ₹26.5 crore in the abridged prospectus and the vendor quotations add to about ₹26.6 crore (DRHP p.95, AP p.6, our arithmetic, DRHP p.99 to DRHP p.111); Suresh Chand Garg's holding is printed as 52,78,240, 52,78,140, 52,78,420 and 53,03,240 shares and Kusum Gupta's as 30,68,790 and 32,18,790 (DRHP p.87, DRHP p.88, DRHP p.90, DRHP p.89);

the promoters chapter says the promoters hold 1,15,26,030 shares, 65.51%, against 96.07% elsewhere (DRHP p.240, DRHP p.87); the July 2022 rights issue is priced at ₹27 in one table and ₹37 in others (DRHP p.78, DRHP p.83); the preferential issue is 4,40,400 shares in most places and 4,04,400 in one (DRHP p.83); the management discussion calls the company “an IT consulting company” (DRHP p.298);

the monitoring paragraph refers to a working capital object that does not exist (DRHP p.70); the litigation summary lists the three labour cases as filed by the company (DRHP p.31); the management discussion says no material events occurred after March 31, 2026, though the closure directions were revoked and shares were allotted after that date (DRHP p.298, DRHP p.28, DRHP p.83);

Hero MotoCorp is described as a customer for more than seven years and as a new association in 2024 (DRHP p.188, DRHP p.219); RoCE is given as 27.46%, 42.61% and 30.08% for FY24 to FY26 in the strategy text against 30.25%, 42.61% and 27.46% in the KPI table (DRHP p.189, DRHP p.119); the capitalisation statement prints share capital of ₹17.5 crore against ₹17.2 crore (DRHP p.285, DRHP p.57);

the financial indebtedness chapter says there are no unsecured borrowings and then lists ₹0.62 crore (DRHP p.288); the promoter company's page refers to “Charming Fashions Private Limited” (DRHP p.242).

21Five questions for management

1. How many tonnes and parts were sold in FY24, FY25 and FY26, and at what average price per kilogram of casting?
2. Why did four-wheeler revenue fall from ₹66.7 crore in FY25 to ₹41.9 crore in FY26, and which customer accounted for the fall?
3. Why did work in progress rise from ₹8.9 crore to ₹21.2 crore in two years, and how much of it is older than ninety days?
4. What will the Facility III shed and utilities cost, and what utilisation must the new plant reach to cover its rent and depreciation?
5. What share of FY26 revenue came from customers whose prices are linked to aluminium prices, and how long is the lag before costs are passed on?

2Sources and cited facts

This study was read from 2 documents the company filed. The 166 figures it cites are listed under the document each came from, with the page and the sentence as printed.